An environmental court in Chile has annulled an environmental permit for salmon-farming firm Australis to operate its Obstrucción grow-out center in the Magallanes region, finding the permit’s evaluation process had deficiencies.
Through the permit, the firm sought to increase the center’s biomass production from 5,140 metric tons (MT) per cycle to 7,500 MT, thereby increasing aquaculture activity in waters near the Kawésqar National Reserve, located in the far south of Chile.
A complaint against that permit was filed two years ago at the environmental court by the Kawésqar Indigenous community Grupos Familiares Nómades del Mar, as well as Indigenous communities ATAP and Residente Río Primero in alliance with the civil society organizations FIMA, the Inter-American Association for Environmental Defense (AIDA), and Greenpeace.
In the recent ruling, Chile’s Third Environmental Court of Valdivia said that upon further review the environmental assessment originally presented by Australis was insufficient in respect to the area of influence defined for the center, particularly with regard to marine fauna, landscape, and tourism. The court also found deficiencies in the analysis of the transit of vessels and the harmful dispersion of nutrients in the water that are “typical of aquaculture activity,” according to a joint release by the NGOs
The environmental activists opposing the permit lauded the ruling, saying it confirms the importance of an adequate environmental assessment. The overload of biomass that the farming center would generate would cause ecological collapse and an increase in disease, they said, adding that intensive antibiotics and waste creation would devastate the local seabed, affecting the marine ecosystem “and all species that depend on the good state of the oceans to live.”
The NGOs also accused Australis of not waiting to obtain the final environmental permit to increase production at the site as required by law.
Australis questioned the ruling, saying that it sets a dangerous precedent and threatens future investments in the industry.
“The persistent judicialization of investment projects is a concern for the country's sustainable development and legal certainty. These are legal actions against the state … that call into question the system as a whole. Not only does it delay private investment, but it also diverts state resources and hinders the establishment and development of clear and predictable technical criteria and guidelines,” Australis said in a statement sent to SeafoodSource. “In the specific case of this project, we respect the pronouncements of the administrative and judicial authorities; we are currently reviewing the ruling and analyzing the available legal and administrative actions to evaluate next steps.”
In the meantime, Australis lawyer Ignacio Mujica filed a petition with the court for the sentence to be suspended. According to Mujica, the company had reasonably operated under a previously greenlighted environmental permit that authorized production of 7,500 MT, stocking the grow-out center accordingly. Bringing ongoing production down now would have legal, financial, and environmental effects, he added.
“The forced removal of biomass entails disproportionate economic costs – far exceeding reasonable margins for provisional implementation – and also entails significant health and operational risks,” the petition said. “These circumstances compromise both the sustainability of the production cycle and the integrity of the environmental oversight system by introducing uncertainty and unforeseen imbalances.”
The firm is currently fighting battles on more than one front.
Chinese foodservice group Joyvio, which owns Australis, is locked up in a USD 1.22 billion (EUR 1.13 billion) lawsuit against businessman Isidoro Quiroga, the former owner of Australis, over its purchase of the firm in 2018 for USD 921 million (EUR 850 million).
Joyvio has accused Quiroga and associates of withholding information regarding overproduction at the company’s farming centers during the sale’s due diligence phase, which led to the sale price being artificially inflated. In 2022, Australis filed a self-report with Chile’s Superintendency of the Environment (SMA) after “detecting facts that could constitute infractions.”
The previous administration had undertaken systematic salmon overproduction since 2016 at least, Australis’s current owners said, generating overproduction of more than 80,000 MT of salmonids. The company said it had restructured corporate governance and implemented different measures to eradicate such bad practices – the first measure being to file a self-report with the SMA and end the regulatory breaches detected.
Subsequently, it implemented a program to cut production from 2023 to 2027 in order to compensate for the denounced overproduction while also pursuing civil and criminal actions against those that it said were “responsible for the systematic policy of overproduction and its concealment.”
